Committee
Justice Committee 08 February 2011
08 Feb 2011 · S3 · Justice Committee
Item of business
Long Leases (Scotland) Bill: Stage 1
Dale Strachan
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I am glad that you asked me that; I read Professor Gretton’s evidence with interest. The history of property development in Scotland is an interesting pointer in that regard. As I said, many town centres were redeveloped from the 1960s onwards, through the 1970s, 1980s and 1990s. When we reached the current century, the 175-year lease restriction was put in place.There is policy consistency and strong merit in seeking to raise the bar. If I was asked for my opinion on where the qualifying period should lie, I would suggest that a 225-year period would preserve the commercial elements.If an earliest cut-off point of some date in 1950, say, was applied to the 225-year lease term and the lease was required to have at least 175 years to run as at 9 June 2000, I can see that there would be a strong policy element in terms of dealing with the issue in a way that is consistent and addresses the structural concerns with regard to 999-year leases and the remainder, which were sometimes, but rarely, on commercial terms.I have experience of a one million-year lease for part of a building in Paisley: that is Victorian conveyancers’ optimism at its very best. I have no issue with the conversion of ultra-long leases, but there was no restriction on a one million-year lease.I would favour a 225-year initial term as a cut-off point, with at least 175 years to run on the date when that became the maximum lease length.
In the same item of business
The Convener
Con
The principal business of the morning is the final day of evidence taking on the Long Leases (Scotland) Bill. I welcome the first panel of witnesses, who are...
Bill Butler (Glasgow Anniesland) (Lab)
Lab
Good morning to the panel.In your written submission to the committee, you express concern that the exemption in section 1(4)(a) of the bill, which relates t...
Dale Strachan (Brodies LLP)
I am happy to do so.I am a commercial property lawyer. The bill has ambitions to scope matters relating to residential leases and other forms of lease other ...
Bill Butler
Lab
We are grateful to you for taking us through the delights, as you put it, of the leasehold mechanism in Scotland. However, could you perhaps address the poin...
Dale Strachan
Through the mechanism as drafted, limits have been chosen for reasons that have been explained. The variable element of the lease can often be the substantiv...
Bill Butler
Lab
If I understand you correctly, you are saying that the provisions in the bill as introduced are inflexible, lack certainty and could be viewed as being unfai...
Dale Strachan
It might discourage future investment in commercial property by serious investors.
Robert Brown (Glasgow) (LD)
LD
Let us develop some of that background. You have given an expostulation of the advantages of the commercial lease arrangement. I find it difficult to see tha...
Dale Strachan
That probably owes something to the creative ability of lawyers to produce a commercial solution that achieves clients’ objectives. It was not in any way an ...
Robert Brown
LD
People might suggest that ultra-long leases are sometimes entered into for tax advantages, given the way in which they are structured. There is an argument t...
Dale Strachan
In truth, I cannot think of strong reasons why that would be a driver, other than that investors look for certainty in their long-term investments. We mentio...
Robert Brown
LD
Accepting the argument that there may be technical issues with the compensation arrangements, would you, in an ideal world, prefer the existing ultra-long le...
Dale Strachan
It is my submission that parties who made commercial arrangements in a free environment should not have them unwound against their will. Parliament has made ...
James Kelly (Glasgow Rutherglen) (Lab)
Lab
The City of Edinburgh Council, supported by Glasgow City Council, pointed out in evidence to the committee that leases in which a large grassum is paid with ...
Dale Strachan
There is a distinction to be made between situations in which the vendor was a local authority and, possibly, subject to common good restraint and those in w...
Dave Thompson (Highlands and Islands) (SNP)
SNP
Good morning to you both.Professor Rennie said in oral evidence to the committee that it would be “crazy” to set the rent exemption level as low as £100, and...
Dale Strachan
That is extremely difficult. I am not a property valuer, but I fully accept that if the intent is—as I understand it from the policy memorandum—not to captur...
Dave Thompson
SNP
Thank you for that. We heard from Professor Gretton, who does not support the exemption in principle, that an alternative approach might be to extend the qua...
Dale Strachan
I am glad that you asked me that; I read Professor Gretton’s evidence with interest. The history of property development in Scotland is an interesting pointe...
Dave Thompson
SNP
Would you be concerned that moving to 225 years as opposed to 175 years would lead to a lack of consistency with the requirements in the Abolition of Feudal ...
Dale Strachan
Consistency has its merits, but so does pragmatism. We are dealing with a period of about 50 years in which all the town centres in Scotland have been redeve...
The Convener
Con
Are there any other questions for Mr Strachan? I see that Nigel Don wants to come in.
Nigel Don (North East Scotland) (SNP)
SNP
Good morning. Have you read the discussion in the Official Report on leases for underground pipelines and the like? I hope that you have followed that debate...
Catherine Reilly (Brodies LLP)
One of the witnesses thought that they were not leased—is that right?
Nigel Don
SNP
Yes.
Catherine Reilly
Others said that they were. We are talking about the leases for the pipes and cables.
Nigel Don
SNP
The certainty is that there are pipes and cables down there; the uncertainty is whether leases exist.
Catherine Reilly
I know that there are leases because I have been involved in that kind of thing. In Scotland, in the law of servitudes, for there to be a benefited property ...
Nigel Don
SNP
Are you confident that such a lease is a meaningful, legal entity in Scots law?
Catherine Reilly
Yes, and I have taken an opinion on that from another academic. Because of the importance of bringing oil in from the North Sea, it is not something to be do...